Benefits cash grab denied

CLAIMS that thousands of pensioners could have to hand back money to the Government after they were overpaid benefits have been denied.

Figures show that overpayments of pension credit have trebled in the past three years. As many as one in 50 of those who qualify for the top-up - around 165,000 - could have been given too much money.

The Tories warned that many could expect demands to return the money, given the Government's record of clawing back overpaid benefits.

Tory welfare spokesman David Ruffley said: 'Pension credit overpayment has trebled in the last three years - from £40m in 2001-2002, to £50m in 2002-2003, £100m in 2003-2004 and now £130m in 2004-2005.

However, today pensions minister Stephen Timms told the BBC the Government had written to pensioners, making clear that this was not the case. He said: 'When there has been a mistake, a letter goes out. It makes it clear that social security law does not allow us to require repayment.'

And he added: 'But of course if people want to, and are willing to pay that money back, we'll be pleased. But nobody will be forced to pay the money back.'

Pension credits were introduced by Chancellor Gordon Brown to help those on the lowest incomes.

The row over the payments follows chaos in Labour's tax credits system, introduced in 2003 to help low earners.

In 2004, around one third of the six million households eligible for tax credits received overpayments.

The Revenue's attempts to claw back the money - at least £2bn - caused some serious hardship.

Pensions minister James Plaskitt said: 'Pension credit continues to deliver more money to the poorest pensioners, with more than three million getting more money as a direct result.

'A number of initiatives have been introduced to focus on error. The checking regime is more rigorous.'